The Commission is providing a copy of this disciplinary of ... · 4 GEGE-000407, issued by the California Gambling Control Commission (Commission), which 5 was revoked by t4e Commission

The Commission is providing a copy of this disciplinary

pleading (Accusation, or Statement of Reasons,

Statement of Particulars, or Statement of Issues) so the

public is as informed as possible of pending

administrative proceedings regarding the allegations

contained in the pleading. An Accusation or Statement

of Issues is simply an allegation of facts that, if true,

may rise to the level of disciplinary action against or

denial of a license, registration, work permit or finding

of suitability. The facts contained in the pleadings

should not be taken as established or proven. The

licensee/applicant will have an opportunity to dispute

the allegations in a formal administrative proceeding.

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KAMALA D. HARRIS Attorney General of California SARA J. DRAKE Senior Assistant Attorney General JENNlFER T. HENDERSON Deputy Attorney General State Bar No. 206231

1300 IStreet, Suite 125 P.O. Box'944255 Sacramento, CA 94244-2550 Telephone: (916) 324-5366 Fax: (916)327-2319 E-mail: [email protected]

Attorneys for Complainant, Chief of Bureau of Gambling Control, Departmel1t of Justice

BEFORE THE

CALIFORNIA GAMBLING CONTROL COMMISSION

STATE OF CALIFORNIA

14 In the Matter of the Accusation Aga~st:

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ALBERT CIANFICffi, Sole Proprietor KELLY'S CARDROOM· 408 "0" Street Antioch, CA 94509

License Number '990002

BGC Case No. SA2011-00012

OAHNo.

FIRST AMENDED ACCUSATION AND PETITION TO REVOKE PROBATION

Martin Horan, Jr., Complainant herein, alleges as follows:

PARTIES

23 1 .. · Martin Horan, Jr. (Complainant) brings this Accusation and Petition to Revok~

24 Probation under the Gambling Control Act (Bus. & Prof. Code § 19800 et seq., "Act") solely in

25 his official capacity as the Acting Chief of the Bureau of Gamblirig Control within tlie California

26 Department of Justice (Bureau).

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First Amended Accusation and Petition to Revoke Probation

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1 2. Albert Cianfichi (Respondent) owns, as a sole proprietor, the gambling enterprise

2 presently known and doing business as Kelly's Cardroom, located at 408 "0" Street, Antioch,

3 California 94509 (Cardroom). Respondent is presently the holder of gambling license number

4 GEGE-000407, issued by the California Gambling Control Commission (Commission), which

5 was revoked by t4e Commission on September 22, 2011, but the revocation was stayed and the

6 Respondent was placed on probation subject to express terms and conditions. This license will

7 expire on January 31, 2012," unless renewed.

8 . JURISDICTION

9 3. This Accusation and Petition to Revoke Probation is brought before the Commission

10 pursuant to the terms of the Settlement and Oider approved by the Commission in this proceeding

11 on September 22,2011 (2011 Commission Order), and the statutes and regulations set forth

12 below. A copy of the 2011 Commission Order is attached hereto as Exhibit A and incorporated

13 herein by this reference. All section references are to the Business and Professions Code unless

14 otherwise stated.

15 4. The 2011 Comrtrlssion Order imposed discipline against Respondent's license at

16 pages ~ through 6, in pertinent part, as follows:

17 2011 COMMISSION ORDER

. 18 Respondent's gambIing.1icense is revoked. However, the revocation is stayed and .

19 Respondent is placed on probation until November 25,2011, on the following terms and

20· conditions:

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Respondent will sell his sole proprietorship in the Cardroom as soon as

possible.

Respondent will have until the end of the probationary period to find a

bonafide purchaser, who will be able to be licensed by the California Gambling

Control Commission.

A purchase and sale agreement and an application for licensure by the

proposed purchaser must be submitted to the Commission by the purchaser

within the probationary period. Respondent will use due diligence in

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First Amended Accusation ·and Petition to Revoke Probation

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attempting to find a purchaser who is already licensed by the California

Gambling Control Commission, in order to expedite the licensing of the new

owner.

The "purchase and" sale agreement must contain a provision that a portion

($112, 000) of the purchase price must be set aside as a reserve fund to pay for

"the penalty and costs agreed to in this Stipulation and will be paid.to the

Bureau out of escrow at the time of sale.

If a purchase and sale agreement and an application for licensure by the

proposed purchaser are not submitted to the Commission on or before

November 25, 2011, the Cardroom shall be closed by operation this Stipulated

Settlement and Disciplinary Order. After closure of the Cardroom, the

Respondent shall have until May 26,2012 to find a purchaser who may be

licensed.


proposed purchaser are not submitted to the Commission before May 26,2012,

the Respondent's gambling license shall be revoked by operation of this

Stipulated Settlement and Disciplinary Order. Notwithstanding any other

provision hereof, dUling the period of November 25,2011 to May 26,2012,

the Respondent may apply for an extension oftime to file a purchase and sale

agreement for up to six (6) months upon a showing of good cause such as, but

not limited to, license processing delays by the Bureau or Commission, or the

rejection of a buyer by the Commission.

Respondent acknowledges that the Bureau seeks to have him to divest himself

of his interest in the Cardroom as soon as possible.

Respondent hereby agrees to employ an outside compliance consultant who

will be responsible for ensuring that LlJ.e Cardroom is in complete compliance

with the regulations promulgated by the Commission and the Bureau.

The outside consultant shall have expertise in the above-referenced regulations

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and the operations of the Commission and the Bureau.

* * * Respondent agrees that he will minimize his activities in the gambling

establishment, and will charge a validly licensed key employee with the day~

to~day operation of the Cardroom.

Respondent shall obey all state and federal laws and regulatio:ns substantially

related to, or governing the practices an~ operation of gambling

establishments.

JURISDICTION

5. Business and Professions Code, section 19811 provid~s, in part:

(b) Jurisdiction, including jurisdiction over operation and concentration, and supervision over gambling establishments in this state and over all persons or things having to do with the operations of gambling establishments is vested in the commission.

6. Business and Professions Code, section 19823 provides:

(a) The responsibilities of the commission include, without limitation, all of the following:

(1) Assuring that licenses, approvals, and pemiits are not issued to, or held by, unqualified or disqualified persons, or by persons whose operations are conducted in a manner that is . inimical to the public health, safety, or·welfare.

(2) Assuring that there is no material involvement, directly or indirectly, with a licensed gambling operation, or the ownership or management thereof, by unqualified or disqualified persons, or by persons whose operations are conducted in a manner that is inimical to· the public health, safety, or welfare ..

7. Business and Professions Code, section 1~824 provides, in part:

The commission shall have all powers necessary and proper to enable it fully and effectually to·carry out the policies and purposes of this chapter, including, without limitation, the power to do all ofthe fellewing:

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(b) For any cause deemed reasonable by the commission, ... limit, condition, or restrict any license, permit, or approva1, or impose any fine upon any person licensed or approved. The commission may condition, restrict, discipline, or take action against the license of an individual owner endorsed on the license certificate of the gambling enterprise whether or not the commission takes action against the license of the gambling enterprise.

* * * (d) Take actions deemed to be reasonable to ensure that no ineligible,

unqualified, disqualified, or unsuitabl_e persons are associated with controlled gambling activities. -

8. Business and Professions Code section 19826 provides, in part:

The departrllent[l] shall have all of the following responsibilities:

*** (c) To investigate suspected violations of this chapter or laws ofthls

state relating to gambling ....

* * * (e) To initiate, where appropriate, disciplinary actions as provided in

this chapter. In connection with any disciplinary action, the department may seek restriction, limitation, suspension, or revocation of any license· or approval, or the imposition of any fine upon any person licensed or approved.

9. Business and Professions Code, section 19930 provides, in part:

(b) If, after any investigation, the department is satisfied that a license, permit, finding of suitability, -or approval should be _suspended or revoked, itsha11 file an accusation with the commission in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of title 2 of the Government Code.

(c) In addition to any action that the commission may take against a license, permit, finding of suitability, or approval, the commission may also requi~e the payrnent.offines or penalties. However, no fine imposedshall exceed twenty thousand dollars ($20,000) for each separate violation of any provision of this chapter or any regulation adopted thereunder.

(d) In any case in which the administrative law judge recommends that the c-ommissioll revoke, suspend, or deny a license, the administrative

I "Department" refers to the Department of Justice. (Bus. & Prof. Code, § 19805, subd.

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law judge may, upon presentation of suitable proof, order the licensee or applicant for a license to pay the department the reasonable costs of the investigation and prosecution of the case.

(1) The costs assessed pursuant to· this subdivision shall be fixed by the administrative law judge and may not be increased by the commission. When the ·.commission does not adopt a proposed deCision and remands the case to the administrative law judge, the administrative law judge may not increase the amount of any costs assessed in the proposed decision.

(2) The department may enforce the order for payment in the superior court in the county in which the administrative hearing was· held. The right of enforcement shall be in addition to any other rights that the division may have ·!3.S to any licensee to pay costs.

(3) In any judicial action for the recovery of costs, pro.of of the commission's·decision shall be conclusive proof of the validity of the order of payment and the terms for paynlent.

*** (f) For purposes ·ofthis section, "costs" include costs incurred for

any of the following:

(1) The investigation of the case by the department. ,

(2) The preparation and prosecution of the case by the Office of the Attorney General. .

10. California Coqe of Regulations, title 4, section 12554 provides, in part:

(a) Upon the filing with the Commission of an accusation by the Bureau recommending revocation, suspension, or other discipline of a h~lder of a license; registration, permit, finding of suitability, or approval, the Commission shall proceed under Chapter 5 (commencing with s~ction 11500) of Part 1 of Division 3 of Title 2 of the Govermnent Code.

11. California Code of Regulations, title 11, section 2053 provides:·

(a) The Bureau may require a gambling establishment to present satisfactory evidence that there is adequate financing available to protect the public's health, safety and welfare.

(b) A gambling establishment shall maintain a separate, specifically designated, insured account with a licensed fmancial institution in an

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First Amended Accusation and Petition to Revoke Probation . i

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amount not less than the total value of the chips in use by the gambling establishment. The funds from that account may only be used to redeem the chips of that gambling establishment. That account may not be used as collateral, or encumbered or hypothecated in any fashion. Alternatively, the Bureau may allow the gambling establishment to provide some other form of security acceptable to the Bureau, in lieu of maintaining the required account.

(c) A gambling establishment shall maintain a separate, specifically designated, insured account with a licensed financial institution in an

, amount not less th~n the total amount ofthe monies that patrons of that gambling establishment have on deposit with the gambling establishment. The funds from that account may only be used to return to the patrons the balance of monies on deposit with the gambling establishment. That account may not be used as coilateral, or encumbered or hypothecated in any fashion. Alternatively, the Bureau may allow the gambling establishment to provide some other form of security acceptable to the Bureau, in lieu of maintaining the required account.

SPECIFIC STATUTORY AND REGULATORY PROVISIONS

12. Business 'and Professions Code section 19850, subdivision (a) provides in part:

Every person who, either as owner, lessee, or employee, whether for hire' or not, either solely or in conjunction with 'others, deals, operates, carries on, conducts, maintains, or exposes for play any controll~d game in this state, or who receives, directly or indirectly, any compensation 01'

reward, or any percentage or share of the money or property played, for keeping, running,or carrying on any oontrolled game in this state, shall apply for and obtain from the ~ommission, and shall thereafter maintain, a valid state gambling license, key employee lioense, or work pennit, as specified in this chapter. In any criminal prosecution for violation of this section, the punishment shall be as provided in Section 337j of the Penal Code.

13. Business and Professions Code section 19856, subdivision (a) provides in part:

The burden of proving his or her qualifications to receive any license, is on the applicant.

14. Business and Professions,Code section 19857 provides in part:

No gambling'license shall be issued unless, based on all the information and documents submitted, the commission is satisfied that the applicant is an oftne following;

(a) A person of good character, honesty and integrity.

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(b) A person whose prior aCtivities, criminal record, if any, reputation, habits, and associations ,do not pose a threat to the public interest of this state, or to the effective regulation and control of controlled gambling, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of controlled gambling or in the carrying on ofthe business and financial arrangements incidental thereto.

15. Business and Professions Code section 19859 provides in part:

The commission shall deny a license to any applicant who is disqualified for any of the following reasons:

(a) Failure of the applicant to clearly establish eligibility and qualification in accordance with this chapter.

(b) Failure of the applicant to provide information, documentation, and assurance required by this chapter or requ~sted by the Chief, or failure of the applicant to reveal any fact material to qualification, or the supp~ying of infonnation that is untrue or misleading as to a material fact pertaining to the qualification criteria.

16. Business and Professions Code section 19920 provides:

It is the policy of the State ofCaliforlJ.ia to require that all establishments wherein controlled gambling is conducted in this state be operated in a manner suitable to protect the public health, safety, and general welfare of the residents of the state. The responsibility for the employment and maintenance of suitable methods of operation rests with the owner licensee, and willful or persistent use or toleration of methods ·of operation deemed unsuitable by the commission or by local govenunent shall constitute grounds for license revocation or other disciplinary action.


No owner licensee shall operate a gambling enterprise in violation of any provision ofthis chapter or any regulation adopted pursuant to this chapter.


Each owner licensee shall maintain security controls over the gambling premises and all operations therein related to gambling, and those security controls are subject to the approval ofthe commission.

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19. California Code of Regulations, title 4, section 12220,18, provides, in relevant part:

The Commission may revoke a registration or license, upon any of the . following grounds, after a hearing conducted pursuant to the same procedures applicable to the revocation of a gambling establishment license:

(a) The registrant or licensee committed, attempted to commit, or conspired to commit any acts prohibited qy the Act or this chapter,

(b) Any act or omission by the licensee that would disqualify the licensee from obtaining 1icensing under this chapter.

20. California Code of Regulations, title 4, section 12568, provides, in relevant part:

(a) A license for an individual or any finding of suitability or approval granted by the Commission, other than a work pennit, and an owner license for a gambling establishment if the owner licensee has committed a separate violation from any violations committed by the gambling establishment shall be subj ect to a minimum discipline of suspension for one day of nonnal business operation and a maximum discipline of revocation, which may be stayed on tenns and conditions and any monetary penalty as described in Section 12554(d)(7) of this chapter, if the Commission finds that the holder has:

(1) Violated or is out of compliance with conditIons, limitations, or orders or directives imposed by the Commission, either as part of all initial grant of license or registration, renewal of such, or pursuant to disciplinary action,

* * * (4) Engaged in any dishonest, fraudulent, or deceptive activities in

connection with controlled gambling,

FIRST CAUSE FOR DISCIPLINE

(Unsuitable method of operation and failure to maintain securjty controls)

21: Respondent's license is subject to discipline pursuant to.Business and Professions

Code sections 19920 and 19924, in that on or about July 15,2009, the Cardroom''g surveillance 24 .

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equipment was not operable during an anned robbery of the Cardroom and its patrons.

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1 SECOND CAUSE FOR DISCIPLINE

2 (Allowing unlicensed individuals to receive share of gaming revenue)

3 22. Respondent's license is subject to discipline pursuant to Business and Professions

4 Code sections 19823 and 19850, in that on or about June 13,2010 andlor August 14,2010,

5 Respondent contracted with unlicensed individuals to share forty percent of the Cardroom's net

6 revenue.

7 THIRD CAUSE FOR DISCIPLINE

8 . (Respondent's financial problems, practices, and inadequate

9 funding pose immediate threats to public interest)

10 23. Respondent's license is subject to discipline pursuant to Business and Professions

11 section 19920:and California Code of Regulations, title 11, section 2053, in that he is failing to

12 operate his gambling enterprise in a manner suitable to protect the public health, saf~ty, and

13 general welfare of the residents of the state.

14 24. On or about December 13, 2011, the Bureau was informed that a former employee

15 of Kelly'.s ·Cardroom had filed a formal complaint with the California Division of Labor

16 Standards, Department oflndustrial Relations, based on non-payment of wages. The Bureau's

17 investigation has revealed that Kelly's Cardroom has failed for some time, including during the

18 period since the 2011 Commission Order, to pay employees for all hours worked, andlor failed to

19 have sufficient funds to cover payroll accounts, and has paid some employees in cash "under the

20 table." On or about April 1, 2010, Respondent, on behalf of the Cardroom, borrowed $ 8,000

21 from an employee and to date has not repaid it. A civil lawsuit to recover this amount was filed

22 in Contra Costa County Superior Court on June 1,2011.

23 25. During the time period between May 2010 and July 2010, Respondent, on behalf of

24 the Cardroom, borrowed a total of $44,000 from two patrons. Five checks written on the

25 Cardroom's business account to repay the money were all returned unpaid due to insufficient

26 funds. To date, despite demand, $38,500 of this amount has not been repaid.

27 26 .. The Bureau's investigation has revealed that the Cardroom does not have sufficient

28 funds to cover the Cardroom's gambling chips in play.

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27. On November 23,2011, Respondent submitted a check for $7,600 to the

Commission that was returned for non-sufficient funds. Civil judgments have been entered and

collection actions are currently pending in state court against Respondent. On or about October

20,2011, a civil judgment was entered against Respondent, dba Kelly's Cardroom, in Contra

Costa County Superior Court. The judgment was based on multiple checks that were returned for

non-suffi.cient funds.

. 28. On or about June 16, 20ll! a tax lien in the ~ount of$5,587 was recorded against

Respondent,. dba Kelly's Cardroom, by the State of California, Employment Development

Department. As of December 13, 2011, Respondent is not current in filing his required federal

Employer's Quarterly Federal Tax Returns.

29. Respondent has inappropriately comingled his personal finances and funds with

those of the Cardroom.

FIRST CAUSE TO REVOKE PROBATION

30. Complainant realleges ,paragraphs 21 through 29 as if fully set forth herein.

31.. Grounds exist to revoke probation and impose the order of revocation under

California Code of Regulations, title 4, section 12568, subdivision (a) (1), in that the

Respondent has failed to comply with the terms and conditions of the probation set forth in

the 2011 Commission Order. On November 23, 2011, a purchase agreement and application

for licensure were submitted to the Commission. However, the submitted gaming application

was incomplete as it contained only one of the four pages of the application form. The check

that accompanied the application was returned to the Commission by its.bank due to non~

suffi9ient funds. The application fee was not paid to the Commission until January 3, 2012:

Respondent therefore did 110t comply with the requirement to have a purchase agreement and

24 . ganring application on file by the deadline of November 25,2011 and is in violation of the

25 2011 Commission Order.

26 32. Respondent ·also failed to comply with the terms and conditions of the probation

27 set forth in the 2011 C?mmission Order that r~quired him to employ an outside compliance

28 consultant to ensure that the Cardroom is in complete compliance with. the regulations

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1 promulgated by the Commission and the Bureau. The purchase agreement submitted to the

2 COmplission does not comply with the 2011 Commission Order because the agreement does

3 not truly divest the owner of interest or control of the Cardroom. Grounds also exist to revoke

4 probation and impose the order of revocation for the Respondent's violations of the Gambling

5 Control Act's provisions and regulations.

6 OTHER MATTERS

7 33. On January 23,2012, the Bureau issued an emergency order suspending

8 Respondent's license pursuant to Business and Professions Code section 19931, subdivision

9 (a). The emergency order was filed with the Commission on or about January 24, 2012, and

10 is effective until further order of the Commission or final disposition of any proceeding

1-1 conducted 'pursuant to Business and Professions Code section 19931, subdivision Cd).

12 PRAYER

13 WHEREFORE, Complainant requests that a hearing be held on the matters herein alleged,

14 and that following the hearing, the Commission issue a decision:

15 1. Re.voking or :suspending Respondent's Gambling License.

16 2. Revoking probation and reimposing the order of revocation issued September 22,

17 2011 against the Respondentfs Gambling License; and ordering payment of the $60,000 fine and

18 the $52,000 investigation and prosecution costs reimbursement set forth in the 2011 Settlement . .

19 and Order.

20 3. Awarding Complainant, pursuant to subdivisions (d) and (f) of Business and

21 Professions Code section 19930, the costs of investigation and costs of preparation and

22 prosecution of this Accusation and Petition to Revoke Probation before the Commission, in a sum

23; according to proof; and

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First Amended Accusation and Petition to Revo~e Probation

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Dated:

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Taking such other and further action as the Commission may deem appropriate.

January 25,2012

J~

M9 RAN IV, Acting Chief Bureau of Gambling Control California Department of Justice Compl~ant

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First Amended Accusation and P.etition to Revoke Probation

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EXHIBIT A

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KA-MALA D, HARRIS Attol'ney General of California .SARA J.DRAI<E Senior A.sslstant Attorney General JSNN1FUR T, HeNDBRSON Deputy Attomey General State :Sar No, 206231

1eOO r Stree~,Sulte J25 P,O, Box 944255 Sa(,';ramellto, CA 94244-<2550 Telephone: (91o) 324~S366 Fax: (916) 327-2319 .' E-mail:[email protected] '

A.ltorl1ey~'ior qomplClincmt, Chi~rof Bureau of ' Gambltrtg Control, Departl'llB11J of Justioe ,

:BEFORE THE

CAtlFORNlA GAMBLlNG CONT.ROL COMMISSION .•••.• '. _ . •. ~_ .. - .!. •••..• _ ....• " .••

STATE OF CALIFORNIA

In tile Matter <>f tll~ Accusation AgllillSh 13

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15 ALBERT CIANFICBl, Sole Proprietor KELL1:'tS CARDROOM 0 ,

O:A.H No, 201~050(t95

STIPULATION AND ORDER 16 ' 4{)S 110" Street

, Antioch,'C:A 94509. 17

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License Number (}EGE-0004,07

21 'The parties to, theabove-oaptioned'proceedlng agree and stipulate as follows: ., ' , ,

22. , .. PAA'I'm$ .'

23 1. Albert Cianflchi (Respondent Owner) owns, !IS a sole proprietol') the .gambling

1,4 enterprise presently known and doIng business as Kelly's Cal'ol'oOm) located at' 408 "0" S1.Te~f) ,

25 Antioch, C~llbnia 94509 (Cardroom), Respondent Owner is pn~sentl;y the holder of gwnbllng

26 lioense numbei' 0:808-0'00407) fOrn'wl), 11 umbel' 9.90002, fOl' the ,gambllJlg enterprise issued b}1

27 t~e Ca:lifornia,GmnbJlng Contl'oJ CommissIon (Commissio'h) pursuant t\' the Gar.nbl,lng Control

2B

Settlement and Order

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Act (Bus, & Pl'of. Code, § 19800, etseq.,'the "Act"). Albert Cianfichf1.s state gElmbJing license

2 was in fuJl force and effect at all times re]ev,mt to the facts set fOl'tll herein. Th~s license will

3 expire oll.June 30, 20 I J, unless renewed ..

4 2, Martin Horan, Jr; (Com.plainant) Is the Acting Chief of'th~ Bureau of Gambling

5 'Control, Califomia Depal'tment oi" Justice (Btll'eau), and Is hereby stlbstltuted In a.s the

() ,ComplaInant III this proceeding, His involvemepl in tbis action waa solely In his official capacity

7 'under theAot and Is represented in thjs mattei' by Kamala D. Harris, Attor.ney General of the State:

8 ,of California, by Jennifel' '1', Hendel'son, Deputy Attorney General. I ' 9 PROCEDURAL BACKGROUND

10 '3. On April 7, 2000, the 'BUl'eau, then designa.ted th,e Division ot'Gambling Control, " ••• ~ •••••••••••• - • ' ...... p •••••• '.. ." _ •• - ••••••••• - •• - .~ •••••••••• ~ .... '" _. ""'_' •••••• ,_.~ ......... ,_, 0'

Jl, caused to be filed with the Commlssiol1 and serVed upon Resp~~d'e~t 'a F'irst'j, .. ~~~;~i~d 'A~~miation 12 which referl'ed the mattei' for an evidentiary hearing,

'13 ' 4. Pdol' to the heariitg~ tbepartles entered into a.s~ipulated settl emen~ arid disciplinary

14 order and on'September 14> 2006) ,the ~rnm!sglon voted to adopt the 'Stipu lated Settlement and

15 Disciplinary Order '(2006 Comrn!sslon Deoision), " , ,

J 6 .lUlUSDICTION

17 5; 'On or about january 19, 20JO-, pursuahtto BushwS3 and Profe~sions Code seotioPl

18 19930, the, Bureau oaused to be filed with the Commission and served upon Respondent an

19 Accusation ~nd Petltlotl to Revoke Probation. A copy oftbe Accus!1.tlon and Petition to Revoke' , ,

, 20 Probation with attachments, Includlw~ the 2006 Commission Decision, Is 'at:tacht:>d hereto and

21 inCOl'Pl:ll'ated by refel'olloe herein as Exhibit A, Respondent timely flied a Notioe ofDet~mse witb

, , •• 1 ••• ,. _ •

23 6, This ma.tter was set fOI' hearing on May 16 and 1,7, 201 J before all administrative lllw

24 jud,ge'purSI!ant to the Administrative lJl'Oceql.l~e'Act,' Government Code section' 1 J ,500 ,et seq.

25 7, The parties agree tha~ the Commission has JUJ'lsdlctlon ove!' this mat1:e!' and has

26 authority t~ approve thl,s Stlplllatjo~ and OL'denmdel' B~lsjne5s a;,d Professions Code sections

27 t 9823, 19824, fil'ld 19930, and Government Code seotlon 114i5.60,

28 PDR:POSE

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Settlement an,~ Onler I

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~. The plllties now desire to settle this matter on the terms set forth ill this Stipulation,

Aocordingly, the parties Jointly request that the CommissloR, at Its next l'egLllarly sched\lled

public meeting, or as soon thereedter as the Commission may conslde!' the matter, approve the

settlem\,)nt of tills matter as set forth herein,

9, The pUl'pose of this, Stipulation is to: (a) finally and complete))' settle the within '. .' . .

matter on terms agreeable to tl)e parties; (b) a.llow the sale of the CaJ'dropm; (0) effeot the

revooation of Respondent Cianfichl's State Gambling License; and Cd) enS1.lre that the new ownel'

,01' ~wliers of the Cardroom are holders of a State O~mbl ins License,

SETTLEMENT 'l'l!,"RMS

1 0, COJ'!'Iplainantl Martin Horan, Jr.,' and ~espondent, Albert Cianfichl, ,.hereby agree that

"

.- ... ~ .. a.,., ••• a .... ~.. .• .... •. "'" .,""._ • _ ... "a ._ •••• ,- _"' __ " .... __ .•• _ , ..... " , .. __ r." __ ._ •• __ ••••••.•. . ••••.. , •. _ •• __ ..... ,_ •. , •. _

this Stipulated 'Settlement w'll1 be,Presented 1.0 the Commis!!ion at Its next regulal'ly scheduled

meeting, or as soon t~ereafter as the matter can be heard, as a ftnal disposition of the violations

aUeged,ln the Accusation and PetItion to Revoke Probation, wh Ich was signed by Compla.inant's

predooessol' on or about Jan~lary 19, 2010, t , • •

11, Rf,:Ispondent does not-contest ,tbe facts alleged in the Acous~tion and the I?etltlon to

Revoke Pr-obationl and cOllsents to ~ay' a fmo of$60,000 and relmbutse, the ~u,reau the su~ of

$52)OOO'for the Inve~lgatjon and prosecution afth!s matter, Payment shall be made from the t • • '. , •

eSCI'OW1 a.t ciosing 011 the sare of the Cl:wdroom,

12, Respondel1t admits the tnlth of the allegatlo,ns made in 1be Aocusation and Petition to

Revoke ProbatIon fOl' the purposes o'fthis stipulation only; theseadml,ssions are the eq~;lyalent of . , ,

a "nQI conlesCH plea, S~lch admlssions shall not be admissible in any other oiyil or c.riminal

proceeding.

13. 'Respondent agrees not to oontest the Aocusation and Petitlon to Rllvoke Probation.

and intends to sUI'rendel' his gambling· lice,nse,

14. Respondent's gambling license Is revoked, Howeve\'~ tbe revocation \s stayed and

Responaent is plao~d on pl'obatlQil until November 2.5, 2011, ~n the fol1ow,lng terms !\l1d

cQndi,tions:

a, ~espondeltt wUl'sell his sole proprieto1'ship in the Cardl'o~m as ~oon as 3


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,possibI~.

b. . Respondent wUI have tlnttl the end of the probatlonarjl perlod to find a

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b~n·l.l,tide p~lrohasel'. wh() wUl' be ab'le to be licensed by the CnllfOl'nia Gambling

Control Commission,

A pUl'ol;tllle and saJe agreel~ent and fUl appll~atlol1 for licensure by the

pl'oposedpu~chaser must be subm itted to the Commission'by .the purchasel' . ,

within the probationary period, RespondentwHl use'due diligence In

attempting to ~nd II purohaser who is already lioensed by the· California

Gambling qontl'ol CommIssion, in ordei,to expedite tho licensing of the new

ownel'. _~ •• , 'H_ .,'... •• . ••

._ ••••• ~_.N •••• ~ •••••• _M •• _ •••• _ ••• _~ •••• M ••• _ ••••••• _ ••••• _ ••••••• __ ••••• __ •• _ ......... _ •• _ •••• _ •• ___ •• _.

d, . The purohase and sale agreement must contain a proviSion that a portioh

. ($1 '12, 000) of the purchase prioe must 'beset a.side .as a reserve fund to p~y for

the penalty and oosts agreed to II) ;j;hia Stip\llatloll' and will be paid to the

'Bureau out of esOl'ow at the time of sale,

e, Lf Ii pU1'chase and Bal~ agreement and an applioatloll' for licensul'e by th~

proposed pUl'ch~er are not sublrlitted to the Commission on'ol' before

Novembe.r25,,'ZOll~ the Cardroom shaH be closed by operatIon-this Stipulafed

'Settlement ~nd Dlsclplinal'y.Ordel'. After closurlil ofthe CardrClom, ~he

Respondent shall ha.ve untllMay 26,2012 to.fnid a p.Ul'ChaSB1' who maX'be

licensed,

f, If l\ ptlrchase tIner sale aB'!'~ement and an applioation for lioensure by the

proposed. purchaser-are not s-ubmitte4 it{ th.~ ¢om.mi'ssi~n. b~fore May 26l 201:2.:.: .' . the Respondent's gambling licenSe) shall ,be revoked by operation of this .

St!pLl~ated Settlement and Disoiplinary OrdeJ', Notwithstanding .any otheJ'

provls1ol1 hereof, dUI'ing the perIod of Nov em bel' 25, 2011 to May ~6, 2012,

the Respondent Inay apply for a.n extensIon oftlme to tile a' purchase and sale

agreement fOl' ~IP to six (6) months tlpOn a snowing of good cal.lse such as, but

not limited to, lic~nse pl'ooessing delays by the Bureau or Commission, DJ'the

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rejeotion ofa btlyel' by the Commissloll,

Resp?nderlt acknowledges that the BUl'eau seeks to hel.V~ him to divest himself'

ofhts interest In the Car'droom as soon ~s possIble,

h, Respondent hereby a,Sl'ees to employ !In outside oompliance ()onsultant will;> . . ,

wUl be responsible fOl' ensuring that the Cardroom Is in oomplete compliance

with the regulations promulgated by tbl;\ Commission and th(; Bureau. .

The outside oonsl.lltant shall have exp.ertise in the aboye-referenced regulations . ..' . .

i.

and tbe operatIons of th~ Commission and the Bu)'(!)au,

j, Respondent wlll practioe~ultable m'etnods ~Coperatjo11, including, but not j

:,.~ ....... )im.!t~~ to., ?D ly_eJl1ploying il1dlvld~als Y.t~.~. ~~J9.,~ \'.~li~ wo~k.p<?"n:!~ o.J~ Ji~~n.~~ . .. . .:, .. I...... . as required by the Act,

. . le, Respondent agrees that he. will mlnimiz;e his activities in 'the gambling

, .'

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establisnment, and w!ll ohal'ge a validly lioensed key ~~pJoyef}wlth the day~

to-da.y operation of the Carol'oom, . .

Respondent shaU obey .a.1I s.t~te and federal laws and l'egillati ons sub~tfl.ntl~lIy

related to, or governing the pl'aqtlcils and oper'ation of gambling

establishments, R~spondeut shaH 'report any of the foliowing occurrences to

. the Commissioll l in w,dtlng, within seven:tY~two (72) h~urs of such Q~our)'erio6:

1.. An arrest 01' Issuanoe of,a c1'imlnal compJl.llnt for' violation of any pl:ovls!on of the Gambling ~ontro(Act; ..

2, A plea of guilt)' or nolo cQntendre, or c011viction, in any state or federal . '" .... ."

", crimInal 'pi'Oceedlng involving 1,ID)' cl'lme o~her·than tl'a:ffic violations,

15. 'Respondent and Complainant m1ltu~l1y agree that this stipu lation and order IS in.

complete and fll1al 'settiement'ofthe allegations contained hel'ein, Respondent has beeln flJlly

advised by hIs lega.1 oounsel, Rodney J. Blonlen) as to the effeot ofthls Stipulatioll and Order in

that it bli1ds Respondent to the terms and condi~lons oontained herein, By t11e terms ofthls.

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1 27 ugreement, Respondent shall not have"tne right to further' contest af!d/orappeai the sllnctions

28 pl'ovided herein. Respondent recognizes that he is entering into this Stlpl.llation in lieu ofa . . '


he~rlllg and the ability to contest these allegations, Respondent entel'S into t~ls Stipulation with

2 the advice of'ooLlnsel, yoluntarlly, ImowhlgrYI and inteJligentl)~, and Elgrees to &e bound by this

3 Stipulation lind the terms oftbe Deoision and Ol'del' upon adoptIon b)'the'Qommlsslon, . 4 16. The parties agree thal, III the .event the Commission reii'uses to .accept this Stipulation,

S It shaJ.l·become void tlnd null, within 15 business delYs afiel' the Commission meeting at which

6 this Stipulation IS l'ejected, ' '

7 17. Respondent ~grees that in the event the CommIssion r.ejects the Stip1.IJatfon t\Sits

8 deoision Imd order and an evIdentiary heal'ing~ pl,.II'SLlant to BLlsiness & Professlons Code Section

9 1 ~930 beoomes neoeRsary, no m~mbe!' ofthe Cornmissloltl nor the Executive DireotoJ', shar'j bl,l

)0. disqualified because ofpriol' oonsideJ;ation of the Stipulation. . . . _ •• - ....... - .' •••• - .'. .. • " N" , ••• h"~ •• , •••••••• _ ••••• _~_._ •••• '.'_ •• _ •• __ •••• __ , ._. __ • ___ 0 •••••• _____ ••

J 1 l~. This Stipulated Settlement shall be subject to approval by the CommisSion.

12 Respol1de~t specifically agrees that, at any time "follQwing execution ofthkStipulated Settlement, . . '. .'. .

13' but prior·to the Commlssion ls decision whethel' to adopt this St~pulated Settleme!11 as Its decision ., ,

14 and el1t~· the Discipllnary'Order, counsel fOl' Complainant and'the staff of the Division may ,

\ 5 o~mmuriicate d lreotly with the Commlsslon regardl~g th is .stipulation and settl ement wIthout , .

16, no~ioe to, or,par.tioipation by, ResPQnd~nt ~r bis counsel, and that'no such communications shall

17 be del,'lmed a proh,lbitad e}(; parte oommunicatlon:

18 19. By signing the S,tipulatfld .Settlement:and Disoipllnary Order,.Respondent understands

]9 and agrees that h~ may not withdraw th is agreement Or seek tq rescind the stIpulation prior to the

20 time the Commission considers and acts upon it,

21 ~,O, T~e p~:~i~s agree should this StipulatloIl become void, ~othing in the StipulatIon, or

22' tll'e. fact that the:'(larties entflreci'into the Stipl)lation, ·sh~lI be admissible. in:an~.subsequenc hearing

. Z3 on the merits of the violation that is the subject of the Stip1:1iatiQl1,

24 . W AlVER AND ADViSEMENT

25 2], This Stipulation has been nll!y discussed between Respondellt Albeit Clanficbi-

26 Kelly's Cardroom and its attorney, Rodney B!onien, and RespondentAlb~rt. Clani:1chl n&s been

'27 fully advised of the effeot ofthi.s Stipulatiotl as It waives any rights it ma.y'have to: (a) an

28 !1.drninistrative hearing on the Accusatlor.; -(b) all)' judicial challenge to this StipulatIon and Order; 6


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1 KAMALA D. HARRIS Attorney General of California.

2 SARA J. DRAKE Senior Assistant Attorney General

3 JENNIFER T. HENDERSON Deputy Attorney General

4 State Bar No. 206231 1300 I Street, Suite 125

5 P.O. Box 944255 Sacranlento, CA 94244-2550

6 Telephone: (916) 324-5366 Fax: (916) 327-2319

7 E-mail: [email protected] Attorneys for Complainant, Chief of Bureau of

8 Gambling Control, Department of Justice

RECEJVED BY CGCC LEGAL DIVISION

lOll DEC 13 AM II: 21

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BEFORE THE

CALIFORNIA GAMBLING CONTROL COMMISSION

STATE OF CALIFORNIA

14 In the Matter of the Accusation Against: .1

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ALBERT CIANFICHI, Sole Proprietor KELLY'S CARDROOM 408 "0" Street Antioch, CA 94509

License Number 990002

BGC Case No. DGC # 03-00130-01

OAH No. 2010050095

ACCUSATION AND PETITION TO REVOKE PROBATION

21 Martin Horan, Jr., Complainant herein, alleges as follows:

22 PARTIES

23 1.' Martin Horan, Jr. (Complainant) brings this Accusation and Petition to Revoke

24 Probation solely in his official capacity as the Acting Chief of the Bureau of Gambling Control

25 within the California Department of Justice (Bureau).

26 2. Albert Cianfichi (Respondent) owns, as a sole proprietor, the gambling enterprise

27 presently known and doing business as Kelly's, located at 408 "0" Street, Antioch, California

28

Accusation and Petition to Revoke Probation

1· 94509 (Cardroom). Respondent is presently the holder of gambling license number GEGE-

2 000407, issued by the California Gambling Control Commission (Commission), which was

3 revoked by the Commission on September 22, 2011, but the revocation was stayed and the

4 Respondent was placed on probation. This license will expire on January 31,2012, unless

5 renewed.

6 JURISDICTION

7 3. This Accusation and Petition to Revoke Probation is brought,before the Commission

8 pursuant to the terms of the Settlement and Order approved by the Commission in this proceeding

9 on September 22,2011 (2011 Commission Order), and the statutes set forth below. A copy of the

10 2011 Commission Order is attached hereto as Exhibit A and incorporated herein by this reference.

11 All section references are to the Business and Professions Code unless otherwise stated.

12 4. The 2011 Commission Order imposed discipline against Respondent's license at

13 pages 3 through 6, in pertinent part, as follows:

14 2011 COMMISSION ORDER

15 Respondent's gambling license is revoked. However, the revocation is stayed and

16 Respondent is placed on probation until November 25,2011, on the following terms and

17 conditions:

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b.

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Respondent will sell his sole proprietorship in the Cardroom as soon as

possible.

Respondent will have until the end of the probationary period to find a

b.onafide purchaser, who will be able to be licensed by the California Gambling

Control Commission.

A purchase and sale agreement and an application for licensure by the

proposed purchaser must be submitted to the Commission by the purchaser

within the probationary period. Respondent will use due diligence in

attempting to find a purchaser who is already licensed by the California

Gambling Control Commission, in order to expedite the licensing of the new

owner.

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The purchase and sale agreement must contain a provision that a portion

($112, 000) of the purchase price must be set aside as a reserve fund to pay for

the penalty and costs agreed to in this Stipulation and will be paid to the

Bureau out of escrow at the time of sale.


proposed purchaser are not submitted to the Commission on or before

November 25,2011, the Cardroom shall be closed by operation this Stipulated

Settlement and Disciplinary Order. After closure of the Cardroom, the

Respondent shall have until May 26,2012 to find a purchaser who may be

licensed.

If a purchase and sale agreement and an application forlicensure by the'

proposed purchaser are not submitted to the Commission before May 26,2012,

the Respondent's gambling license shall be revoked by operation of this

Stipulated Settlement and Disciplin~ Order. Notwithstanding any other

provision hereof, during the period of November 25,2011 to May 26, 2012,

the Respondent may apply for an extension of time to file a purchase and sale (

agreement for l!P to six (6) months upon a showing of good cause such as, but

not limited to, license processing delays by the Bureau or Commission, or the

rejection of a buyer by the Commission.

Respondent acknowledges that the Bureau seeks to have him to divest himself

of his interest in the Cardroom as soon as possible.

Respondent hereby agrees to employ an outside compliance consultant who

will be responsible for ensuring that the Cardroom is in complete compliance

with the regulations promulgated by the Commission and the Bureau.

The outside consultant shall have expertise in the above-referenced regulations

and the operations of the Commission and the Bureau.

* * * Respondent agrees that he will minimize his activities in the gambling

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establishment, and will charge a validly licensed key employee with the day

to-day operation ofthe.Cardroom.

Respondent shall obey all state and federal laws and regulations substantially

related to, or governing the practices and operation of gambling

establishments.

JURISDICTION


(b) Jurisdiction, including jurisdiction over operation and concentration, and supervision over gambling establishments in this state and over all persons or things having to do with the operations of gambling establishments is vested in the commission.

6. Business and Professions Code, section 19823 provides:

(a) The responsibilities of the commission include, without limitation, all of the following:

(1) Assuring that licenses, approvals, and permits are not issued to, or held by, unqualified or disqualified persons, or by persons whose operations are conducted in a manner that is inimical to the public health, safety, or welfare.

(2) Assuring that there is no material involvement; directly or indirectly, with a licensed gambling operation, or the ownership or management thereof, by unqualified or disqualified persons, or by persons whose operations are conducted in a manner that is inimical to the public health, safety, or welfare.


The commission shall have all powers necessary and proper to enable it fully and effectually to carry out the policies and purposes of this chapter, including, without limitation, the power to do all of the following:

* * * (b) For any cause deemed reasonable by the commission, ... limit,

condition, or restrict any license, permit, or approval, or impose any fine upon any person licensed or approved. The commission niay condition, restrict, discipline, or take action against the license of an individual owner endorsed on the license certificate of the gambling enterprise .

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whether or not the commission takes action against the license.ofthe gambling enterprise.

* * * (d) Take actions deemed to be reasonable to ensure that no ineligible,

unqualified, disqualified, or unsuitable persons are associated" with controlled gambling activities. "

Business and Professions Code section 19826 provides, in part:

The departmenteJ shall have all of the following responsibilities:

* * * " (c) To investigate suspected violations of this chapter or laws of this

state relating to gambling ....

* * * (e) . To initiate,where appropriate, disciplinary actions as provided in

this chapter. In connection with any disciplinary action, the department may seek restriction, limitation, suspension, or revocation of any license or approval, or the imposition of any fine upon any person licensed or approved.

9. California Code of Regulations, title 4, section 12554 provides, in part:

(a) Upon the filing with the Commission of an accusation by the -Bureau-recommending revocation, suspension,or other discipline of a holder of a license, registration, permit, finding of suita~ility, or approval, the Commission shall proceed under Chapter 5 (commencing with section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

10. California Code of Regulations, title 11, section 2053 provides:

(a) The Bureau may require a gambling establishment to present satisfactory evidence that there is adequate financing available to protect the public's health, safety and welfare.

(b) A gambling establishment shall maintain a separate, specifically " designated, insured account with a licensed financial institution in an amount not less than the total value of the chips in use by the gambling _ establishment. The funds from that account may only be used to redeem the chips of that gambling establishment. That account may not be used as

1 "Department" refers to the Department of Justice. (Bus. & Prof Code, § 19805, subd.

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collateral, or encumbered or hypothecated in any fashion. Alternatively, the Bureau may allow the gambling establishment to provide some other form of security acceptable to the Bureau, in lieu of maintaining the required account.

( c) A gambling establishment shall maintain a separate, specifically designated, insured account with a licensed financial institution in an amount not less than the total amount of the monies that patrons of that gambling establishment have on deposit with the gambling establishment. The funds from that-account may only be used to return to the patrons the balance of monies on deposit with the gambling establishment. That account may not be used as collateral, or encumbered or hypothecated in any fashion. Alternatively, the Bureau may allow the gambling establishment to provide some other form of security acceptable to the Bureau, in lieu of maintaining the required account.

COST RECOVERY


(b) If, after any investigation, the department is satisfied that a , 'license,permit, finding of suitability, or approval should be suspended or

revoked, it shall file an accusation with the commission in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 oftitle 2 of the Government Code.

(c) In addition to any action that the commission may take against a license, permit, findirig of suitability, or approval, the commission may also require the payment of fines or penalties. However, no fine imposed shall exceed twenty thousand dollars ($20,000) for each separate violation of any provision of this chapter or any regulation adopted thereunder.

(d) In any case in which the administrative law judge recommends that the commission revoke, suspend, or deny a license, the administrative law judge may, upon presentation of suitable proof, order the licensee or applicant for a license to pay the department the reasonable costs of the investigation and prosecution of the case. .

(1) The costs assessed pursuant to this subdivision shall be fixed by the administrative law judge and may not be increased by the commission. When the commission does not adopt a proposed decision and remands the case to the administrative law judge, the administrative law judge may not increase the amount of any costs assessed in the proposed decision.

(2) The department may enforce the order for payment in the superior court in the county in which the administrative hearing was

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held. The right of enforcement shall be in addition to any other rights that the division may have as to any licensee to pay costs ..

(3) . In any judicial action for the recovery of costs, proof of the commission's decision shall be conclusive proof of the validity of the . order of payment and the terms for payment.

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(t) For purposes of this section, "costs" include costs incurred for any of the following:

(1) The investigation of the case by the department.

(2) The preparation and prosecution of the case by the Office of the Attorney General.

SPECIFIC STATUTORY AND REGULATORY PROVISIONS

. 12. Business and Professions Code section 19850, subdivision (a) provides in part:

Every person who, either as owner, lessee, or employee, whether for hire or not, either solely or in conjunction with others, deals, operates, carries on, conducts, maintains, or exposes for play any controlled game in this state, or who receives, directly or indirectly, any compensation or reward, or any percentage or share of the money or property played, for keeping, running, or carrying on any controlled game in this state, shall apply for and obtain from the commission, and shall thereafter maintain, a valid state gambling license, key employee license, of work permit, as specified in this chapter. In any criminal prosecution for violation of this section, the punishment shall be as provided in Section 337j of the Penal Code.

13. Business and Professions Code section 19~56, subdivision (a) provides in part:

The burden of proving his or her qualifications to rec~ive any license is on the applicant.


No gambling license shall be issued unless, based on all the information and documents submitted, the commission is satisfied that the applicant is all of the following:

(a) A person of good character, honesty and integrity.

(b) A person whose prior activities, criminal record, if any, reputation, habits, and associations do not pose a threat to the public interest of this state, or to the effective regulation and control of

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controlled gambling, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of controlled gambling or in the carrying on of the business and frnancial arrangements incidental thereto.


The commission shall deny a license to any applicant who is disqualified for any of the following reasons:

(a) Failure of the applicant to clearly establish eligibility and qualification in accordance with this chapter.

(b) . Failure of the applicant to provide information, documentation, and assurance required by this chapter or requested by the Chief, or failure of the applicarit to reveal any fact material to qualification, or the supplying of information that is untrue or misleading as to a material fact pertaining to the qualification· criteria.


It is the policy of the State of California to require that all establishments wherein controlled gambling is conducted in this state be operated in a manner suitable to protect the public health; safety, and general welfare of the residents of the state. The responsibility for the employment and maintenance of suitable methods of operation rests with the owner licensee, and willful or persistent use or toleration of methods of operation deemed unsuitable by the commission or by local government shall constitute grounds for license revocation or other disciplinary action.


No owner licensee s~all operate a gambling enterprise in violation of any provision of this chapter or any regulation adopted pursuant to this chapter. .


Each owner licensee shall maintain security controls over the gambling premises and all operations therein related to gambling, and those security controls are subject to the approval of the commISSIOn.

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19. California Code of Regulations, title 4, section 12220.18, subdivisions (b) and (j)

provide:

The Commission may revoke a registration or license, upon any of the following grounds, after a hearing conducted pursuant to the same procedures applicable to the revocation of a gambling establishment license:

(a) The registrant or licensee committed, attempted to commit, or conspired to commit any acts prohibited by the Act or this chapter.

(b) Any act or omission by the licensee that would disqualify the licensee from obtaining licensing under this chapter.

* * * (j) The registrant or licensee lends money or chips to gambling

establishment patrons or proposition players, except focexchanging. with a patron chips of one denomination for chips of another denomination.

FIRST CAUSE FOR DISCIPLINE

(Unsuitable method of operation and failure to maintaiIl" security controls)

20. Respondent's license is subject to discipline pursuant to.Business and Professions ~ !

Code sections 19920 and 19924, in that on or about July 15,2009, the Cardroom's surveillance

equipment was not operable during an armed robbery of the Cardroom and its patrons.

SECOND CAUSE FOR DISCIPLINE

(Allowing unlicensed individuals to receive share of gaming revenue)

21. Respondent's license is subject to discipline pursuantto·Business and Professions

Code sections 19823 and 19850, in that on or about June 13,2010 and/or August 14,2010,

Respondent contracted with unlicensed individuals to share forty percent of the Cardroom's net

revenue.

THIRD CAUSE FOR DISCIPLINE

(Lending money to gambling establishment patrons)

22. Respondent's license is subject to discipline pursuant to Business and Professions

Code sections 19920 and 19922, and California Code of Regulations, title 4, section. 12220.1 8,

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subdivisions G) in that on or about May 14,2010, June 6, 2010, and/or July 13,2010, Respondent

lent money to a gambling establishment patron.

FOURTH CAUSE FOR DISCIPLINE

(Unqualified for Licensure - financial problems and inadequate

funding pose threats to public interest)

23. Respondent's license is subject to discipline pursuant to Business and Professions

section 19857, subdivision (b), and California Code of Regulations, title 11, section2053 in that

Respondent is a person whose prior activities, reputation, and/or habits pose a threat to the public

interest of this state, or to the effective regulation and control of controlled gambling, or create or

enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the

conduct of controlled gambling or in the carrying on of the business and financial arrangements

incidental thereto and that the Cardroom is operating while not adequately funded. Respondent

has failed to pay employees for all hours worked, and/or failed to have sufficient funds to cover

payroll accounts. Respondent has borrowed money from an employee and from a patron.

Respondent does not ha.ve adequate funds toco:.ver the Cardroom's chips-in:-use Iiabililty. State.

and federal tax authorities have filed tax liens against the Respondent and Respondent's real

property in connection with the Cardroom's tax liabilities. Notices of default have been recorded

against the Respondent's residence. Respondent does not have the resources required to meet all

his financial obligations.

FIFTH CAUSE FOR DISCIPLINE

(Unqualified for Licensure - Poses Threat: Comingling of Financial Transactions)

24. Complainant realleges paragraphs 20 through 23 as if fully set forth herein.

Respondent is unqualified for a state gambling license pursuant to Business and Professions Code

section 19857, subdivision (b), in that Respondent is a person whose prior activities, reputation,

and/or habits pose a threat to the public interest of this state, or to the effective regulation and

control of controlled gambling, or create or enhance the dangers of unsuitable, unfair, or illegal

practices, methods, and activities in the conduct of controlled gambling or in the carrying on of

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1 the business and financial arrangements incidental thereto. Respondent has inappropriately

2 _ comingled his personal, financial transactions with the financial transactions of the Cardroom.

3 FIRST CAUSE TO REVOKE PROBATION

4 25. Complainant realleges paragraphs 20 through 24 as if fully set forth

5 herein.

6 26. Grounds exist to revoke probation and impose the order of revocation

7 in that the Respondent has failed to comply with the terms of the probation set forth

8 in the 2011 Settlement and Order by failing to employ as of March 2011 an outside.

9 compliance consultant to ensure that the Cardroom is in complete compliance with

10 the regulations promulgated by the Commission and the Bureau, by failing to

11 provide a purchase agreement that does not truly divest the owner of interest or

12 control in the Cardroom. Grounds also exist to revoke probation and impose the

13 order of revocation for the Respondent's violations of the Gambling COIitrpl Act's

14 provisions and regulations.

15 PRAYER

J 6 WHEREFORE,_ Complainant requests that a hearing be held on the matters herem alleged,

17 and that following~the hearing, the Commission issue a decision:

18 1. Revoking or suspending Respondent's Gambling License .

. 19 2. Revoking probation and reimposing the order of revocation issued September 22, -

20 . ~011 against the Respondent's Gambling License; and ordering payment of the $60,000 fine and

21 . the $52,000 investigation and prosecution costs reimbursement set forth in the 2011 Settlement:

22 and Order.

23 3. Awarding Complainant, pursuant to subdivisions Cd) and Cf) of Business and

24 Professions Code section 19930, the costs of investigation arid costs of preparation and

25 prosecution of this Accusation and Petition to Revoke Probation before the COIIUJ?ission, in a sum

26 according to proof; and

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4.

Dated:

Taking such other and further action as the Commission rna . deem appropriate.

. December I.J--, 2011' N IV, Acting Chief

Bur au of Gambling Control California Department of Justice

Complainant

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Documents

The Commission is providing a copy of this disciplinary of ... · 4 GEGE-000407, issued by the California Gambling Control Commission (Commission), which 5 was revoked by t4e Commission